A cornucopia of news, opinion, views, facts and quirky bits that need to be talked about. Join our community and join in the conversation on all matters aviation. The blog includes our weekly round-up of the bits of European aviation you may otherwise have missed – That Was The Week That Was
Last month saw the release of a report commissioned by IATA on the economic benefits of modernising European airspace. It estimates total benefits worth between €126 billion and €245 billion by 2035. (Incidentally, a 2011 report in by the consultancy McKinsey put the benefits at €419 billion by 2030 alone. Have the delays in implementing the Single European Sky (SES) already wiped out €200 billion of benefits?)
The purpose of this report is discussed in this month’s Aviation Intelligence Reporter. Think winning hearts and minds. Or rather, bribing hearts and wallets. It is an attempt to persuade member states of the importance of implementing the SES as soon as possible. The Commission, for too long the misplaced target of the airlines’ ire, must also engage in winning hearts and minds. For the current SES packages to succeed, ANSPs and member states need to be persuaded that there is something in it for them
There is one issue in this report that is worth further discussion. That is, that the €126 billion or €245 billion figure – the exact figure depends on the approach used to estimate the benefits – is gross. It does not take into account the cost of implementing the airspace reforms.
The cost of developing and implementing the SES will likely run into many billions of dollars. The SES’s technological programme, SESAR, is estimated to cost at least €30 billion. Then there’s the cost of all the to-ing and fro-ing at both Eurocontrol and the European Commission.
Not that airlines need to worry too much about that. Much of the funding for the SES programmes comes from the member states through the European Commission. To be fair, the airlines will also be contributing. This includes retrofitting their aircraft with the new technology. But they are also one of the main beneficiaries of a modernised European airspace. Take the €126 billion figure, for example, which includes benefits in the form of airline cost savings, shorter routings, fewer delays, more routes and higher flight frequencies.
In effect, the cost of the SES is being largely socialised but many of the benefits are privatised. We’re not saying that’s necessarily a bad thing. It just reinforces the hypocrisy of the airline industry – anyone remember those allegations about unfair subsidies for Gulf carriers?
